Traditionally, real estate and mortgage brokerage offices employ a plurality of sales agents which they pay on a commission basis. For each sale or listing made by an agent, a sales commission is paid according to the local market conditions as to the amount of such commissions. The brokerage through which the sales are made will collect from each agent a percentage of their sales commissions, or they will charge the agent a monthly “desk fee.”
This economic sales model, however, does not normally provide an incentive for agents to attract other good agents to the brokerage firm, nor does it provide for any retirement or residual income to agents once their sales have stopped. Most real estate brokerage firms do provide for commission sharing between multiple agents when they participate in the listing or sale, but the economic incentive for teamwork is generally not very great, and agents have little incentive to assist in, or take major responsibility for, the training of other agents.
Sales agents are notoriously laterally mobile. They move from one brokerage firm to another as a result of even modest economic inducements. This is highly disruptive to brokerage firms and often generates considerable ill will.
What is needed is an economic revenue sharing method which will enhance the recruitment and retention of agents selling, leasing, and managing real estate and originating real estate loans. Such a model should also encourage teamwork and provide the agents with economic security and retirement income after the agent's sales are terminated. Any such revenue sharing method must be capable of significant returns which are achieved over time rather than at the expense of reducing commissions for sales below a competitive level.
Accordingly, it is an object of the present invention to provide a method and apparatus for compensating participants in a sales force which encourages recruiting, retention and training of the participants, as well as providing a revenue sharing method that is not implemented at the expense of competitive commissions for sales.
Another object of the present invention is to provide a method for revenue sharing in a real estate and mortgage sales force which employs a multi-level structuring of the sales force and revenue sharing among levels so as to provide for residual income, retirement income and death benefits for participants.
The method and apparatus for compensating participants in a multi-level sales force of the present invention has other features and objects which will become apparent from, and are set forth in more detail in, the accompanying drawings and the following description of the Best Mode of Carrying Out the Invention.